PSDP fixed at 900 billion rupees to reach 4.8% GDP – Newspaper
ISLAMABAD: The Annual Plan Coordination Committee (APCC) on Friday finalized a public sector development program (PSDP) worth 900 billion rupees to achieve an economic growth rate of 4.8% in the next fiscal year (2021-2022).
The PSDP for next year is more than 38% higher than the current year’s allocation of Rs 650 billion, while the GDP growth target of 4.8% is cautiously higher than the estimate of provisional production for the current year of 3.94%.
The APCC meeting was chaired by the Vice-Chairman of the Planning Commission, Jehanzeb Khan.
Speaking at a press conference, Planning and Development Minister Asad Umar said the conservative estimate of growth was based on the understanding that large-scale manufacturing (LSM) and agriculture had rebounded this year after a two-year decline and will moderate next year.
The minister said provinces expect to set up Rs1tr for their annual development programs next year.
He said cotton was the only crop that had declined in recent years, declining from over two million bales to 7 million bales this year and that a targeted attempt would start early in the season with good seeds and seed. quality pesticides to recover its production. well above 10.5m of balls, including 4m of balls in Sindh and 6m of balls in Punjab and the rest in other provinces. He said the rise in international prices would also help increase cotton production in the country.
The minister said the provinces were to raise around 1 trillion rupees for their annual development programs (ADP) for next year. He said the federal government’s Public-Private Partnerships (P3A) Authority is expected to launch nearly Rs1tr of development programs next year through private sector investment through Rs70bn funds it would get from the PSDP. .
The minister said that not only the country’s development program but the whole system has come to a halt due to the National Accountability Office (NAB) factor. He said the government had tried through a new bill to exempt bureaucrats and businessmen from the jurisdiction of the NAB to facilitate investment, while politicians continued to fight.
Mr Umar said the bill cannot go through the approval process and he asked the prime minister to pass the bill, if not by majority in the Senate, then through the joint sitting of parliament.
Responding to the question, the minister said most of the provinces’ demands for PSDP shares have been met and could be discussed further with the prime minister at a meeting of the National Economic Council (NEC) next week by the chief ministers of the provinces, but the provinces had unlimited desires and these had to be met within the limits of available resources.
He said the 4.8% growth target for next year would be driven by 3.4% growth in agriculture, 6.8% in industry, 6.2% in manufacturing. and 4.7% in the service sector. He said the key objective of the PSDP this year was to achieve fair and balanced development and to combat the adverse effects of the ongoing Covid-19 pandemic.
He said poultry production will also normalize next year, while electricity consumption is expected to increase by 6% thanks to the industry incentive program. Gas and coal production would also be growth engines, while construction would continue to grow next year, he added.
The minister said about 25% of the total PSDP allocation was for new projects and the rest for the completion of existing programs. Even new projects included in the PSDP would have a shorter gestation period for completion within the next two years.
The APCC has decided to allocate sufficient funds for projects that should be completed by June 2023 and high impact job-generating projects based on sectoral and regional balance. The meeting recommended to CEN a policy of funding provincial projects.
The PSDP of Rs900bn involves foreign aid of Rs101bn. Ministries and divisions, provincial governments and Azad Jammu and Kashmir and Gilgit-Baltistan had forwarded total requests worth 1.5 billion rupees for next year and about 600 billion rupees for projects had to be abandoned.
Projects with 80% expenditure have been fully funded to be completed by June 2022. About 57% (509 billion rupees) of the total allocation has been proposed for the infrastructure sector. Within infrastructure, transport and communication would receive an allocation of Rs265bn (29pc) and the water sector Rs99.4bn (11pc) as required by the national water policy. The energy sector would get Rs 103bn (11pc) and the physical planning and housing Rs41bn (5pc).
An amount of 133 billion rupees has been allocated to the regional equalization program, of which 54 billion rupees for the amalgamated districts of Fata, 45 billion rupees for AJK and GB and 34 billion rupees for the less developed areas under the development programs for northern and southern Balochistan and the development program for Sindh and Great Britain. The construction sector will get Rs41bn.
The social sector received 170 billion rupees, including 28 billion rupees for health and 42 billion rupees for education. Rs 14 billion has been allocated to the Prime Minister’s Rs 10 billion tsunami program and Rs 74 billion to the Sustainable Development Goals.
Rs 62 billion has been allocated to finance the sustainability gap to encourage private sector investment in infrastructure.
Asad Umar said the targeted growth from now on to the remaining period of the current government would be anchored in ensuring quality growth without triggering fiscal and external sector imbalances and to maintain single-digit inflation.
Posted in Dawn on May 29, 2021